5 Reasons To Buy Trading And Keep It For The Long Term – The Motley Fool

The trade office (NASDAQ: TTD) has been a remarkable title for investors for over two years as the company is public, gaining more than 500% even after taking into account its recent decline. The company has a market capitalization of just $ 8.5 billion and a long launch.

Let's look at the market where the programmatic advertising company operates and see why The Trade Desk is a company that investors should buy and keep in a long-term drawer.

The Trade Desk is located at the intersection of several powerful media changes. Source of the image: Getty Images.

1. Exploit the digital continuous shift

Advertising continues to shift from traditional media such as television and television to the digital realm. By 2019, global digital advertising spending is expected to reach $ 333 billion, up nearly 18% from the previous year, and account for more than 50% of total advertising, according to eMarketer. While these numbers are impressive, consider this: by 2023, global spending on digital ads is expected to exceed $ 517 billion and more than 60% of the total.

The Trade Desk is perfectly positioned to continue to take advantage of this unique change in his life.

2. Programmatic is the wave of the future

Programmatic advertising is one of the fastest growing segments of the digital advertising market. The process uses sophisticated algorithms and high-speed computers to automate the ad buying process and deliver it in real time, while presenting the ads more accurately to the consumers most likely to act accordingly.

By 2019, programmatic advertising is expected to increase 19% over the previous year, reaching over $ 84 billion and accounting for 65% of all digital advertising. This growth is expected to continue, reaching $ 98 billion by 2020 and constituting 68% of all digital advertising, according to Zenith Media.

Programmatic is the Trade Desk butterbread, and its new Koa AI-based system can run 9 million queries per second to better match target audiences and improve results.

3. The Trade Desk grows even faster

The trend towards digital and programmatic solutions represents a huge opportunity, and no business benefits from this better than The Trade Desk. In 2018, the company's business turnover grew 55% over the previous year, which shows that it steals market share from incumbent operators. What makes this growth all the more impressive is that it has accelerated compared to the 52% growth achieved in 2017.

This growth is driven by several booming categories. The ads on connected TVs have increased 800% over 2018, while the audio has gone up by 230%. Mobile ads are also poised for growth, with video up 130% and mobile apps up 90% year-over-year.

With only $ 477 million in revenue last year, the trade office still has a long way to go to develop.

Source of the image: Getty Images.

4. Avoid focusing regulators

One of the biggest challenges for other digital advertisers, such as Facebook (NASDAQ: FB) and Google, a division of Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG), is the increasing control of regulators over data privacy issues.

There is still a cloud hanging over Facebook about Cambridge Analytica and subsequent misuse of personal data. Google is also on the hot seat – earlier this year, regulators of the European Union fined the company about $ 57 million for violating the general data protection regulations, or GDPR, which was adopted last year. Earlier this week, the Irish Data Protection Commission (DPC) launched an additional investigation to determine whether Google's Ad Exchange system continues to violate Europe's privacy rules.

At a teleconference held late last year, the CEO of The Trade Desk explained the important benefit of the company. "Because The Trade Desk does not handle indirectly identifiable consumer data and we do not have a search engine, we can provide a unified open ID that allows advertisers to objectively compare all destinations in their media plan with all other destinations, "said Green. . "Our data and those of our third-party partners can not be directly associated with a person – the Trade Desk platform data does not include names, phone numbers, or social security numbers, for example."

5. High profits

The Trade Desk only went public in September 2016 and, unlike many recent IPOs, the company is profitable. In 2018, the company generated adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $ 159 million, up 67% from the previous year. Net income grew an even more impressive 73% to $ 88 million.

For 2019, the Commerce Bureau expects this trend to continue, recently increasing its guidance for Adjusted EBITDA to $ 188.5 million, up from the previous forecast of $ 182 million.